Austin’s housing market is cooling into late summer, with inventory rising, buyer activity dipping, and price trends revealing a widening gap between high-end and entry-level homes.

Market Overview

The Austin housing market is showing signs of slower momentum as of mid-August 2025. Active residential listings currently sit at 17,406, down 740 from the late June peak of 18,146 but still 14.8% higher than the same time last year. A striking 59.5% of all active listings have experienced at least one price drop, a clear indicator of seller adjustments in response to moderated buyer demand.

The market’s Activity Index—which measures the percentage of active listings under contract—has dipped to 19.9%, down from 21.6% last year. For context, a 25%+ index typically reflects strong buyer engagement; anything under 20% signals a more challenging environment for sellers. New construction homes are moving faster than resale, with an Activity Index of 27.71% compared to 17.00% for existing homes, showing that builders are still drawing a meaningful share of buyers with incentives and inventory options.

Housing Prices

Median sold prices are holding at $450,000, which is $100,000 below the May 2022 peak—an 18.18% drop. Average sold prices are at $618,882, down 9.25% from peak values. Price softening has been more pronounced in the lower 25th percentile of the market, where prices are down 1.52% year-over-year and price per square foot is down 4.36%. Conversely, the upper 25th percentile—typically high-end and luxury properties—has seen a modest 3.2% price gain year-over-year, though price per square foot in that segment is still down 3.59%.

While these numbers suggest buyers have more negotiating leverage than in prior years, they also reflect a stabilizing environment compared to the sharp declines of late 2022 and early 2023. Using the historical 25-year compound appreciation rate of 4.981%, it’s projected that if $450,000 represents the bottom of this market cycle, it would take roughly 52 months (November 2029) to return to the previous $550,000 peak.

Regional Trends

Inventory growth is not uniform across the region. Austin’s Months of Inventory now sits at 5.44, up from 4.90 a year ago—an 11.1% increase. Some outlying markets have seen far more dramatic changes: Smithville’s inventory more than doubled year-over-year to 11 months, and Jarrell’s jumped 104.7% to 5.16 months. Conversely, Buda and Wimberley have seen small declines in inventory levels.

Year-to-date, cumulative new listings are at 35,627, just 0.4% higher than last year but 18.8% above the long-term average, meaning sellers are still listing at a healthy pace despite longer market times. Pending listings, however, are down 8.8% year-over-year, showing that buyer contract activity is not keeping up with the influx of new inventory.

List-to-Sale Price Performance

The Sold-to-Active Ratio is at 16.09%, about half of the historical average of 31.88%, underscoring a slower absorption rate. With Months of Inventory at 6.19 compared to 5.36 last year, buyers have more time and choice in the market. The Monthly New Listing-to-Pending Ratio sits at 0.65, well below the 25-year average of 0.82, suggesting more homes are coming to market than going under contract each month. For buyers, this means more room for negotiation; for sellers, it means heightened competition, particularly in price-sensitive segments.

Peak Value Trends

The market’s trajectory since the May 2022 peak has been marked by a broad reset in pricing expectations. Entry-level and mid-market homes have faced the sharpest corrections, while the upper quartile has managed some price stability due to limited competition and high-quality offerings. Still, all segments are seeing buyers push back on pricing, leading to the elevated rate of price reductions we’re seeing now.

What This Means for Market Participants

Buyers: You’re operating in a market with more options and less urgency. With over half of listings seeing price drops, there is leverage to negotiate—particularly on resale homes where activity is slower than in new construction.

Sellers: The gap between list and sold prices is widening, and competition is fierce. Pricing realistically from the start is more critical than ever to avoid extended market times and multiple reductions.

Investors: Higher inventory and softer prices create opportunities, but rent growth and cap rates should be carefully evaluated against holding costs and longer vacancy risks.

Agents: Guiding clients with hyper-local data is key. Market conditions vary widely by city and price point, so knowing your micro-market’s absorption rate and inventory trends will be a competitive advantage.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for August 14, 2025.​